The ability to store intermittent renewable energy from wind and solar and capturing methane emissions from common waste streams to displace natural gas usage are two technologies poised to play a bigger role in a lower carbon future.
While they play separate roles and are at different stages of adoption, energy storage and biogas — also known as renewable natural gas — are poised for growth under increasingly aggressive state and federal climate policies.
They also both face similar barriers to more widespread deployment, notably cost and supportive policies.
“That’s how most new technologies are introduced to commercial systems: They start out pretty high on that cost and adoption curve. As more is produced and becomes more prevalent, the cost generally starts to decline pretty quickly,” said Michigan Public Service Commissioner Katherine Peretick, who was appointed by Gov. Gretchen Whitmer in December.
Peretick was formerly the director of engineering at Toronto-based energy storage project developer NRStor Inc., which focuses on the commercialization of storage projects. Already in her role at the MPSC, Peretick is helping lead an energy storage working group laid out in Whitmer’s MI Power Grid initiative.
Peretick says energy storage technology is still “undervalued” despite being “very advanced.” The electric vehicle industry has helped push battery storage in particular, which has spilled over into the power sector.
“Us in the electric power industry have been seeing the benefits of the scale and cost benefits the electric vehicle industry has generated,” Peretick said.
In 2018, the Federal Energy Regulatory Commission issued an order directing regional power grid operators to begin integrating and appropriately valuing energy storage. The Midcontinent Independent System Operator (MISO), whose territory includes the Upper Peninsula and most of the Lower Peninsula, in March requested a three-year extension for doing so, generating opposition from clean energy advocates.
Despite relatively high costs and a lack of storage mandates in Michigan, supporters tout its versatility.
“It can be used really in any part of the market, whether it’s wholesale, retail or even residential,” Peretick said. “It has so much value that it can be used throughout the system. The main reason it hasn’t been adopted to its full potential at this point is because of these legacy restrictions on implementation and how you structure those business models and pay for those services.”
Lawmakers in Lansing have directed state regulators to study battery storage’s potential in Michigan, while major utilities see it playing a larger role in the future.
Jackson-based Consumers Energy plans to file its next long-term energy plan with regulators in June, and storage may play a bigger role than previously forecasted, said Brandon Hofmeister, the utility’s senior vice president of governmental, regulatory and public affairs. Consumers has already rolled out pilot storage projects on its distribution grid and proposed in its latest rate case a residential storage pilot program that would allow batteries to essentially act as backup generators.
“There’s all of these different value streams that come from batteries,” Hofmeister said. “It could be a supply asset, but also useful on the distribution grid to improve reliability.”
Renewable natural gas
Consumers Energy also is “definitely taking a look” at renewable natural gas, which will be relied upon in part to meet the utility’s net-zero methane emissions goal by 2030 for its natural gas distribution system. Although about 80 percent of that will be done with delivery infrastructure improvements, the remaining 20 percent will be met using renewable natural gas.
“We don’t need a lot of RNG because it takes a lot of methane out of the atmosphere and it’s a powerful carbon abatement, too,” Hofmeister said.
Renewable natural gas is made from anaerobic digesters that process waste from sites including landfills and farms. It can be used for transportation, heating and electricity, and can also be added to existing conventional natural gas pipelines.
Detroit-based DTE Energy is the only Michigan utility that offers a program for customers to voluntarily purchase RNG. Its subsidiary DTE Biomass Energy is also developing RNG projects in Wisconsin.
Last year, San Francisco-based Brightmark LLC announced a partnership with three West Michigan farms that will process waste from the dairy operations in anaerobic digesters at Beaver Creek Farms in Coopersville. After the conversion, the RNG is injected into a local gas pipeline.
In February, state Sen. Rick Outman, R-Six Lakes, introduced Senate Bill 138 that directs state officials to study RNG’s potential statewide, including for various energy customers.
“Renewable Natural Gas is an underutilized resource that can help control greenhouse gases and provide farmers, families, and others in my district with financial benefits to help their businesses,” Outman said in a statement last month.
Johannes Escudero, founder and CEO of the California-based Coalition for Renewable Natural Gas, told MiBiz that RNG has been on an exponential growth curve in recent years after being introduced in the early 1980s. Developers built an average of about one RNG project between 1982 and 2011, or 31 total projects in the U.S. Since 2011, 157 RNG facilities are now in operation. Escudero expects about 800 projects to be online by 2030, and 5,000 by 2040.
Favorable policies like renewable energy standards are key to that growing deployment and driving down costs, he added.
“We still have a long way to go,” Escudero said. “If you compare the RNG industry to large-scale wind and solar, they had a 15-year head start on us. We’re playing catch-up in some respects.”
The MPSC’s Peretick hopes RNG follows similar trend lines as renewables and, more recently, energy storage.
“I hope renewable natural gas will be able to benefit from the lessons of energy storage in terms of regulatory barriers and reducing the roadblocks that the new technology might see,” she said, “and use energy storage as a bit of a trailblazer where it’s setting the path for some new technology adoption.”